Energy Price Cap

Oblivion

I'm a bit confused about the energy price cap that Theresa May announced and which I believe comes into being soon. I'm not sure if we will be eligible.

We are in a 1930s property which has no gas so we are totally dependant on electricity and as you would expect the annual cost is considerable ... estimated to be £1,955 for the coming year.

We are currently with EDF and have just renewed an E7 fixed rate deal until Sept 2019. I get paper billing and pay quarterly i.e. we haven't set up a direct debit.

Farway

I've not seen the small print, but the cap applies to the price per Kw, not total bill

The more you use, at whatever price, you will pay for

Oblivion

Well this is why I am confused. This recent article from the Guardian does say it is a cap on unit prices but then gives an annual cost cap.?

"Does this mean I will only pay £1,136 a year?

No, all the quoted prices are very much averages, based on Ofgem’s consumption figures. What your household will actually pay will still be calculated according to usage – it is the gas and electricity unit prices that are now capped. The £1,136 cap is for direct debit customers. For those who pay by cash or cheque, the cap is £1,219. Ofgem will review the cap every six months – in April and October – and adjust it according to wholesale and other retail prices. Consumers on it can expect the first rise (or fall) in April 2019."

Biscuit_Tin

Is this the same Guardian article that states

From the end of the year, customers who are on their supplier’s standard variable tariff will see their prices capped at £1,136 on average.

Oblivion wrote: »

...
We are currently with EDF and have just renewed an E7 fixed rate deal until Sept 2019. ...

:cool:

Roll on Monday...

Oblivion

So is it right or wrong? Does the fact that I entered into a fixed rate agreement for another year exclude me from the capping arrangements? If so, should I be cancelling the Sept 2019 fixed rate deal and revert to their more expensive standard rate variable to become eligible for the cap?

System

Oblivion wrote: »

So is it right or wrong? Does the fact that I entered into a fixed rate agreement for another year exclude me from the capping arrangements? If so, should I be cancelling the Sept 2019 fixed rate deal and revert to their more expensive standard rate variable to become eligible for the cap?

Unless you know differently, I do not know of a supplier that has a fixed tariff price higher than its standard variable price. That said, the gap has definitely narrowed between fixed and variable rates since the introduction of the SVT cap.

No one is excluded from the capping arrangements but do not confuse the figures quoted with what you will pay. My simplistic reading of the price cap table is that (a) it is regional and (b) the price per kWh is equivalent to what was known previously as the Tariff Comparison rate; ie, that is, it includes the standing charge. It follows that if your usage is more than the assumed kWh/year, you will pay more than the amount quoted in various press releases.

Edit:

A typical customer is defined by Ofgem as:

A customer that uses 3,100 kWH of electricity and 12,000 kWH of gas in a year.

Oblivion

Thank you Hengus, that's useful. As I said we are totally electricity, no gas. I have just checked and our annual consumption is 8,800kWh so I guess that puts us well below the Ofgem 'typical customer' with a combined electricity & gas kWh of 15,100.

System

Oblivion wrote: »

Thank you Hengus, that's useful. As I said we are totally electricity, no gas. I have just checked and our annual consumption is 8,800kWh so I guess that puts us well below the Ofgem 'typical customer' with a combined electricity & gas kWh of 15,100.

It doesn't work like that. The guidance from Ofgem is to give suppliers guidance on how to set the maximum limit of their SVT caps. The table that I have seen does not suggest that a typical electricity only customer uses 15,100 kWhs/year.

The assumptions in the Ofgem paper were that a typical dual fuel customer would pay a maximum of £1136 per year. Multi Register electricity only customers paying by direct debit would pay only £734 but I am struggling to find how may kWhs/year this is based on.

macman

OP, you cannot possibly be spending nearly £2K pa if your total E7 usage is only 8,800kWh, which for an all-electric house is very low. What you need to tell us is your usage on each register (day rate and cheap night rate), i.e. what percentage on each? Typically you need to be using a minimum of 30% on night rate to make it pay. This info is on your annual statement.
Also, how is the house heated and hot-watered? Do you have an immersion heater and NSH's? If you are using day-rate electricity for heating or hot water then your costs will be very much higher.
You are also probably paying extra by not opting for monthly DD: most of the leading fixed tariffs require this.

Oblivion

macman wrote: »

OP, you cannot possibly be spending nearly £2K pa if your total E7 usage is only 8,800kWh, which for an all-electric house is very low. What you need to tell us is your usage on each register (day rate and cheap night rate), i.e. what percentage on each? Typically you need to be using a minimum of 30% on night rate to make it pay. This info is on your annual statement.
Also, how is the house heated and hot-watered? Do you have an immersion heater and NSH's? If you are using day-rate electricity for heating or hot water then your costs will be very much higher.
You are also probably paying extra by not opting for monthly DD: most of the leading fixed tariffs require this.

Firstly I apologise, I misread the annual statement which described the projection if I allowed it to lapse into their standard tariff. Now that I've renewed the fixed tariff it would appear to be nearer £1600.

Useage is 25% Night Rate. Most of that is Immersion tank and towel rail ready for the morning. No NSH, we rely on oil filled standalones and fan fires during the day together with thermal underwear LOL.

I do know I could save some by setting up a DD but I've heard so many scare stories in the past about huge amounts being taken erroneously I just don't trust the *****s. I like to have full control over what leaves my bank account.

JJ_Egan

Scare stories as against the millions that use DD with no problems .
With energy supplies the common DD problem is that users mistake a DD as the amount to be paid that covers total usage . Where it actually may be lower or higher depending upon customers use .You start with an estimate of yearly cost broken down to 12 monthly payments .
Estimate of yearly cost not unknown actual cost .